Raises 2018 Guidance and Provides 2019
Guidance
Raises Run Rate Production and Financial
Guidance
Achieves First LNG Production From Train 5 of
SPL Project
Signs EPC Contract with Bechtel for Train 6 of
SPL Project and Issues Limited Notice to Proceed
Cheniere Energy Partners, L.P. (NYSE American: CQP):
Summary of Third Quarter 2018 Results
(in millions, except LNG data)
Three Months Ended Nine Months Ended
September 30, September 30, 2018
2017 2018 2017
Revenues $ 1,529 $ 903 $ 4,529 $ 2,786 Net income $ 307 $ 23 $ 923
$ 116 Adjusted EBITDA1 $ 604 $ 298 $ 1,825 $ 900 LNG exported:
Number of cargoes 65 44 193 135 Volumes (TBtu) 228 160 691 482 LNG
volumes loaded (TBtu) 228 162 691 483
Summary Distribution Guidance
2018 Full Year
Distribution Guidance
2018
Distribution per Unit
$2.27 - $2.30
2019 Full Year
Distribution Guidance
2019 Distribution per Unit $2.35- $2.55
Run Rate
Distribution Guidance
Run Rate2
Distribution per Unit
$3.30 - $3.60
Adjusted Nominal Production Capacity per
Train3 (mtpa)
4.5 - 4.9
1.
Non-GAAP financial measure. See
“Reconciliation of Non-GAAP Measures” for further details.
2.
Run rate is assumed to be the first full
year of operations for Trains 1-5 at the SPL Project.
3.
Includes expected impacts of planned
maintenance, production reliability, potential overdesign, and
debottlenecking opportunities.
Recent Achievements
Strategic
- In November 2018, Sabine Pass
Liquefaction, LLC (“SPL”) entered into an Engineering, Procurement,
and Construction contract with Bechtel Oil, Gas and Chemicals, Inc.
(“Bechtel”) for Train 6 of the SPL Project (defined below). SPL
also issued limited notice to proceed to Bechtel to commence early
engineering, procurement, and site works.
Operational
- As of October 31, 2018, more than 215
cargoes have been produced, loaded, and exported from the SPL
Project (defined below) in 2018. To date, more than 475 cumulative
LNG cargoes have been exported from the SPL Project, with
deliveries to 29 countries and regions worldwide.
- In September 2018, feed gas was
introduced to Train 5 of the SPL Project as part of the
commissioning process, and first LNG production from Train 5
occurred in October 2018.
Financial
- In September 2018, we issued an
aggregate principal amount of $1.1 billion of 5.625% Senior Notes
due 2026 (the “2026 CQP Senior Notes”). Net proceeds of the
offering, after deducting commissions, fees and expenses, were used
to prepay all of the outstanding indebtedness under our credit
facilities (the “CQP Credit Facilities”). After applying the
proceeds from this offering, only a $115 million revolving credit
facility remains as part of the CQP Credit Facilities, and both the
2026 CQP Senior Notes and our outstanding $1.5 billion of 5.250%
Senior Notes due 2025 became unsecured.
Liquefaction Project Update
SPL Project Liquefaction Train Train
5 Train 6 Project Status Commissioning
Permitted Project Completion Percentage(1) 98.5% — Expected
Substantial Completion 1Q 2019 — Note: Project update excludes
Trains in operation (1) Project completion percentage as of
September 30, 2018
Cheniere Energy Partners, L.P. (“Cheniere Partners”) (NYSE
American: CQP) reported net income of $307 million for the three
months ended September 30, 2018, compared to net income of $23
million for the comparable period in 2017. Cheniere Partners
reported net income of $923 million for the nine months ended
September 30, 2018, compared to net income of $116 million for the
comparable period in 2017. The increases in net income were
primarily due to increased income from operations as a result of
additional natural gas liquefaction trains (“Trains”) in operation
at the SPL Project and decreased loss on modification or
extinguishment of debt, partially offset by increased interest
expense, net of amounts capitalized.
Adjusted EBITDA1 for the three and nine months ended September
30, 2018 was $604 million and $1.8 billion, respectively, compared
to $298 million and $900 million for the comparable 2017 periods.
The increase in Adjusted EBITDA was primarily due to increased
income from operations.
Total revenues increased $626 million during the three months
ended September 30, 2018 as compared to the three months ended
September 30, 2017. Total revenues increased $1.7 billion during
the nine months ended September 30, 2018 as compared to the nine
months ended September 30, 2017. Total operating costs and expenses
increased $331 million during the three months ended September 30,
2018, as compared to the three months ended September 30, 2017.
Total operating costs and expenses increased $904 million during
the nine months ended September 30, 2018, compared to the nine
months ended September 30, 2017. The increases in revenues and
total operating costs and expenses for the three and nine months
ended September 30, 2018, as compared to the comparable periods in
2017, were primarily driven by the timing of completion of Trains
at the SPL Project and the length of each Train’s operations within
the periods being compared.
During the three and nine months ended September 30, 2018, 65
and 193 LNG cargoes, respectively, were exported from the SPL
Project, none of which were commissioning cargoes.
SPL Project
We are developing up to six Trains at the Sabine Pass LNG
terminal adjacent to the existing regasification facilities (the
“SPL Project”). Each Train is expected to have a nominal production
capacity, which is prior to adjusting for planned maintenance,
production reliability, potential overdesign, and debottlenecking
opportunities, of approximately 4.5 million tonnes per annum
(“mtpa”) of LNG and a run rate adjusted nominal production capacity
of approximately 4.5 to 4.9 mtpa of LNG. Trains 1 through 4 are
operational, Train 5 is undergoing commissioning, and Train 6 is
being commercialized and has all necessary regulatory approvals in
place.
Distributions to
Unitholders
We will pay a cash distribution per common and subordinated unit
of $0.58 to unitholders of record as of November 5, 2018 and
the related general partner distribution on November 14,
2018.
Investor Conference Call and
Webcast
Cheniere Energy, Inc. will host a conference call to discuss its
financial and operating results for the third quarter on Thursday,
November 8, 2018, at 10 a.m. Eastern time / 9 a.m. Central
time. A listen-only webcast of the call and an accompanying slide
presentation may be accessed through our website at
www.cheniere.com. Following the call, an archived recording will be
made available on our website. The call and accompanying slide
presentation may include financial and operating results or other
information regarding Cheniere Partners.
About Cheniere Partners
Cheniere Partners, through its subsidiary, Sabine Pass
Liquefaction, LLC (“SPL”), is developing, constructing, and
operating natural gas liquefaction facilities at the Sabine Pass
LNG terminal located in Cameron Parish, Louisiana, on the
Sabine-Neches Waterway less than four miles from the Gulf Coast.
Cheniere Partners, through SPL, plans to construct up to six
Trains, which are in various stages of development, construction,
and operations. Trains 1 through 4 are operational, Train 5 is
undergoing commissioning, and Train 6 is being commercialized and
has all necessary regulatory approvals in place. Each Train is
expected to have a nominal production capacity, which is prior to
adjusting for planned maintenance, production reliability,
potential overdesign, and debottlenecking opportunities, of
approximately 4.5 mtpa of LNG and a run rate adjusted nominal
production capacity of approximately 4.5 to 4.9 mtpa of LNG.
Through its wholly owned subsidiary, Sabine Pass LNG, L.P.,
Cheniere Partners owns and operates regasification facilities at
the Sabine Pass LNG terminal, which includes pre-existing
infrastructure of five LNG storage tanks with aggregate capacity of
approximately 16.9 billion cubic feet equivalent, two marine berths
that can each accommodate vessels with nominal capacity of up to
266,000 cubic meters and vaporizers with regasification capacity of
approximately 4.0 Bcf/d. Cheniere Partners also owns a 94-mile
pipeline that interconnects the Sabine Pass LNG terminal with a
number of large interstate pipelines through its wholly owned
subsidiary, Cheniere Creole Trail Pipeline, L.P.
For additional information, please refer to the Cheniere
Partners website at www.cheniere.com and Quarterly Report on Form
10-Q for the quarter ended September 30, 2018, filed with the
Securities and Exchange Commission.
Forward-Looking Statements
This press release contains certain statements
that may include “forward-looking statements.” All statements,
other than statements of historical or present facts or conditions,
included herein are “forward-looking statements.” Included among
“forward-looking statements” are, among other things, (i)
statements regarding Cheniere Partners’ financial and operational
guidance, business strategy, plans and objectives, including the
development, construction and operation of liquefaction facilities,
(ii) statements regarding expectations regarding regulatory
authorizations and approvals, (iii) statements expressing beliefs
and expectations regarding the development of Cheniere Partners’
LNG terminal and liquefaction business, (iv) statements regarding
the business operations and prospects of third parties, (v)
statements regarding potential financing arrangements, and (vi)
statements regarding future discussions and entry into contracts.
Although Cheniere Partners believes that the expectations reflected
in these forward-looking statements are reasonable, they do involve
assumptions, risks and uncertainties, and these expectations may
prove to be incorrect. Cheniere Partners’ actual results could
differ materially from those anticipated in these forward-looking
statements as a result of a variety of factors, including those
discussed in Cheniere Partners’ periodic reports that are filed
with and available from the Securities and Exchange Commission. You
should not place undue reliance on these forward-looking
statements, which speak only as of the date of this press release.
Other than as required under the securities laws, Cheniere Partners
does not assume a duty to update these forward-looking
statements.
Cheniere Energy Partners, L.P. Consolidated
Statements of Income (in millions, except per unit data)
((1)) (unaudited) Three Months Ended
Nine Months Ended September 30, September
30, 2018 2017
2018 2017 Revenues
LNG revenues $ 1,249 $ 723 $ 3,419 $ 1,718 LNG revenues—affiliate
205 111 886 864 Regasification revenues 66 65 196 195 Other
revenues 9 3 28 7 Other revenues—affiliate — 1
— 2 Total revenues 1,529 903
4,529 2,786 Operating costs and expenses Cost of sales
(excluding depreciation and amortization expense shown separately
below) 756 490 2,291 1,580 Operating and maintenance expense 113 73
306 205 Operating and maintenance expense—affiliate 31 31 87 70
Development expense 1 1 2 2 General and administrative expense 3 5
9 10 General and administrative expense—affiliate 18 18 53 63
Depreciation and amortization expense 107 87 318 239 Impairment
expense and loss on disposal of assets 8 — 8 — Other —
1 — 1 Total
operating costs and expenses 1,037 706
3,074 2,170 Income from
operations 492 197 1,455 616 Other income (expense) Interest
expense, net of capitalized interest (183 ) (153 ) (552 ) (437 )
Loss on modification or extinguishment of debt (12 ) (25 ) (12 )
(67 ) Derivative gain (loss), net 2 1 13 (2 ) Other income 8
3 19 6 Total other
expense (185 ) (174 ) (532 ) (500 )
Net income $ 307 $ 23 $ 923 $ 116
Basic and diluted net income (loss) per common unit $
0.60 $ (1.10 ) $ 1.82 $ (4.12 ) Weighted
average number of common units outstanding used for basic and
diluted net income (loss) per common unit calculation 348.6 247.2
348.6 121.2
___________________________
(1) Please refer to the Cheniere Energy Partners, L.P.
Quarterly Report on Form 10-Q for the quarter ended September 30,
2018, filed with the Securities and Exchange Commission.
Cheniere Energy Partners, L.P. Consolidated
Balance Sheets
(in millions, except unit data)
(1)
September 30, December 31, 2018
2017 ASSETS
(unaudited) Current
assets Cash and cash equivalents $ — $ — Restricted cash 1,457
1,589 Accounts and other receivables 224 191 Accounts
receivable—affiliate 22 163 Advances to affiliate 189 36 Inventory
88 95 Other current assets 55 65 Total
current assets 2,035 2,139 Property, plant and equipment,
net 15,282 15,139 Debt issuance costs, net 15 38 Non-current
derivative assets 25 31 Other non-current assets, net 179
206 Total assets $ 17,536 $ 17,553
LIABILITIES AND PARTNERS’ EQUITY Current liabilities
Accounts payable $ 13 $ 12 Accrued liabilities 503 637 Due to
affiliates 53 68 Deferred revenue 119 111 Deferred
revenue—affiliate — 1 Derivative liabilities 6
— Total current liabilities 694 829 Long-term debt,
net 16,059 16,046 Non-current derivative liabilities 2 3 Other
non-current liabilities 10 11 Other non-current
liabilities—affiliate 23 25 Partners’ equity Common
unitholders’ interest (348.6 million units issued and outstanding
at September 30, 2018 and December 31, 2017) 1,759 1,670
Subordinated unitholders’ interest (135.4 million units issued and
outstanding at September 30, 2018 and December 31, 2017) (1,008 )
(1,043 ) General partner’s interest (2% interest with 9.9 million
units issued and outstanding at September 30, 2018 and December 31,
2017) (3 ) 12 Total partners’ equity
748 639 Total liabilities and partners’ equity
$ 17,536 $ 17,553
___________________________
(1) Please refer to the Cheniere Energy Partners, L.P.
Quarterly Report on Form 10-Q for the quarter ended September 30,
2018, filed with the Securities and Exchange Commission.
Reconciliation of Non-GAAP Measures
Regulation G Reconciliation
In addition to disclosing financial results in accordance with
U.S. GAAP, the accompanying news release contains a non-GAAP
financial measure. Adjusted EBITDA is a non-GAAP financial measure
that is used to facilitate comparisons of operating performance
across periods. This non-GAAP measure should be viewed as a
supplement to and not a substitute for our U.S. GAAP measures of
performance and the financial results calculated in accordance with
U.S. GAAP, and the reconciliation from these results should be
carefully evaluated.
Adjusted EBITDA is calculated by taking net income before
interest expense, net of capitalized interest, changes in the fair
value and settlement of our interest rate derivatives, taxes,
depreciation and amortization, and adjusting for the effects of
certain non-cash items, other non-operating income or expense items
and other items not otherwise predictive or indicative of ongoing
operating performance, including the effects of modification or
extinguishment of debt and changes in the fair value of our
commodity derivatives. Adjusted EBITDA is not intended to represent
cash flows from operations or net income (loss) as defined by U.S.
GAAP and is not necessarily comparable to similarly titled measures
reported by other companies.
We believe Adjusted EBITDA provides relevant and useful
information to management, investors and other users of our
financial information in evaluating the effectiveness of our
operating performance in a manner that is consistent with
management’s evaluation of business performance. Management
believes Adjusted EBITDA is widely used by investors to measure a
company’s operating performance without regard to items such as
interest expense, taxes, depreciation and amortization which vary
substantially from company to company depending on capital
structure, the method by which assets were acquired and
depreciation policies. Further, the exclusion of certain non-cash
items, other non-operating income or expense items and other items
not otherwise predictive or indicative of ongoing operating
performance enables comparability to prior period performance and
trend analysis.
Adjusted EBITDA
The following table reconciles our Adjusted EBITDA to U.S. GAAP
results for the three and nine months ended September 30, 2018 and
2017 (in millions):
Three Months Ended Nine Months Ended
September 30, September 30, 2018
2017 2018
2017 Net income $ 307 $ 23 $ 923 $ 116
Interest expense, net of capitalized interest 183 153 552 437 Loss
on modification or extinguishment of debt 12 25 12 67 Derivative
loss (gain), net (2 ) (1 ) (13 ) 2 Other income (8 )
(3 ) (19 ) (6 ) Income from operations $ 492 $
197 $ 1,455 $ 616 Adjustments to reconcile
income from operations to Adjusted EBITDA: Depreciation and
amortization expense 107 87 318 239 Loss (gain) from changes in
fair value of commodity derivatives, net (10 ) 14 37 45 Impairment
expense and loss on disposal of assets 8 — 8 — Legal settlement
expense 7 — 7 —
Adjusted EBITDA $ 604 $ 298 $ 1,825 $
900
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181108005167/en/
Cheniere Energy Partners, L.P.InvestorsRandy Bhatia,
713-375-5479Megan Light, 713-375-5492orMedia RelationsEben
Burnham-Snyder, 713-375-5764
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